Noodles shop faces closure as developer seeks compulsory sale

A decades-old traditional noodles shop in Hong Kong is facing closure as developer Lai Sun Group has successfully won a bid for compulsory sale of the premises, Ming Pao Daily News reported Thursday.

Leung Faat Noodle Shop, which has stood on Ki Lung Street in Sham Shui Po district for 38 years, has for a long time refused to sell its shop premises to Lai Sun Group, which has secured the other ground floor shop and 15 residential flats in the building.

Following a revision of Compulsory Sale for Redevelopment Ordinance in 2010, a developer may make an application for an order to sell all the undivided shares in a lot where the owners of 80 percent of properties in a building supported it, but only if one of three other conditions was met: the building was industrial, or more than 50 years old, or if each unit made up 10 percent or more of the lot.

The threshold to trigger such a move used to be 90 percent earlier.

Lai Sun combined three flats on each of the first to fifth floors to come up with five bigger flats, thus increasing the percentage of undivided shares of the enlarged flats and fulfilling the requirements for a forced sale at the Lands Tribunal.

The owner of the noodles shop, which has become a household name for locally made noodles and vermicelli, has alleged what that the developer did was to simply exploit loopholes in the law and deny room for small traditional shops to survive.

A representative from Lai Sun confirmed that it made an offer to the noodles shop in June and subsequently made an application for a compulsory auction in late August after the noodles shop failed to respond.

It is believed that Lai Sun made an offer of HK$20 million (US$2.58 million) but the noodles shop owner wanted as much as HK$60 million. Lai Sun went in with an improved offer of HK$24.5 million in August, or an offer for a shop space elsewhere plus a HK$2 million relocation subsidy. Lai Sun claimed they never heard back from the noodles shop.

The rationale of the Development Bureau’s revision of the compulsory sale policies, lowering the threshold for compulsory auction from 90 percent to 80 percent, was to speed up urban renewal.

Chief Secretary Carrie Lam, then head of the Development Bureau, commented a few years back at a legislative council meeting that the building where the noodles shop is located did not meet the requirements for a compulsory sale for redevelopment.

Shop owner Yeung Yee-hing said he hoped Lam would honor her words to protect the interests of ordinary citizens and step out to clarify if the actions by Lai Sun are legal or not.

Yeung insisted that he only wanted to continue to run the shop and that the size of Lai Sun’s offer is irrelevant. He defended his request for HK$60 million, saying that the high price was only meant to ward off Lai Sun and that he had no real intention to sell.

Yeung mourned the gloomy prospects of small shops like his in Hong Kong. He said he may have to close down his business in the worst case scenario.

Wong Ho-yin, convenor of urban-planning group Land Justice League, said this was the first time that a developer has raised the percentage of undivided shares of a property to trigger a compulsory sale. Such actions are against the rationale of the policies, he said.

According to Wong, the noodles shop has written to the Development Bureau and Carrie Lam requesting clarifications on the law.

The Development Bureau said the case will be dealt with just like any other cases, where the requirements of a compulsory sale must be met.

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